Please read below, I am not sure of the outcome, however we will wait and see how below turns out.
I received this update this morning.
HS Dent Forecast Update Thursday, October 9, 2008
There are finally some potentially positive signs for the markets. Treasury bond yields moved up strongly yesterday which reflects that the "flight to quality" is receding.
Oil prices have gotten close to the bottom of our range at $85, which suggests commodities could be bottoming. A rally in industrial metals like copper could be the first sign that the markets are anticipating a recovery down the road.
The Dow has finally held 9,200 for a second day without crashing again. And finally, jobless claims fell a bit rather than spiking up with the recent turmoil and slowing in retail spending.
There are still no signs that we are in a serious recession, although they may come.
On the other hand, we haven't seen a strong rally despite very good news of a global rate cut yesterday, which would suggest a bottom isn't quite in. As we commented yesterday, a likely scenario would be for a choppy rally upward for a few days and then a final slight new low, say perhaps just below 9,000.
If the Dow can break above 9,620, then it should rally further up towards 10,000 - 10,100. Then we could see a final pullback and buying opportunity. If we instead break down below 9,200 then we could see final sell-off and panic near term without a more substantial rally first.
We will continue to monitor.
HS Dent Forecast Update #2
Thursday, October 9, 2008
Stocks did break down after the Dow violated 9,200, but since then stocks have been fighting as they have fallen rather than crashing. We think late today is a good time for more aggressive investors to start buying, just above or below 9,000. In one of our portfolios that we manage we will be buying today, using 50% of our cash, and then looking for a retest early next week or better signs of a confirmed rally to add the other 50%.
PNA Price at posting:
28.4¢ Sentiment: Hold Disclosure: Held
